Insurance adjustors have been known to use the expression “making a mountain out of a mole hill” when attempting to bargain down the value of a claim. In a recent case, a “mole hill” of a claim turned into a mountain of a judgment when a $990 dispute, which was reduced to a $188 dispute before trial, resulted in a $25,343 judgment against an insurance company found to be acting in bad faith.

In Hartunian v. Pilgrim Insurance Company, the plaintiff was a doctor who treated a woman who had been injured while riding as a passenger in another person’s vehicle in 2007. The vehicle was covered by a standard Massachusetts automobile insurance policy issued by the defendant insurance company. The policy included personal injury protection (PIP) benefits.

The Plaintiff Doctor’s Allegations

The doctor treated the plaintiff a total of five times and submitted records and bills in documentation of each treatment. Ninety days after receiving the documentation, the defendant paid the doctor for the first two visits. The defendant later made a partial payment on the remaining three visits but intentionally underpaid the doctor by $990. The defendant based its nonpayment on its determination that the charges were unreasonable as compared to other medical providers in the area, but it did not notify the doctor or the passenger of its intention not to pay the full amount within 10 days of the doctor’s submission of the bills.

After demanding payment for nearly a year, the doctor eventually filed suit for the unpaid $990, as well as damages and costs pursuant to Mass. Gen. Laws ch. 93A and ch. 176D. The defendant then paid the doctor $990 and filed a motion for summary judgment. The trial court granted the motion as it related to the issues of breach of contract and declaratory judgment, but denied it with respect to the remaining issues.

What Happened in the Trial Court

Prior to a bench trial, the parties agreed to reduce the claim to $188, the amount representing the interest on the period during which the doctor claimed the defendant insurer engaged in a bad faith delay of payment. After a bench trial, the defendant was found liable to the doctor for violation of both Mass. Gen. Laws ch. 93A and ch. 176D and awarded the doctor $25,343 in damages.

The Appellate Court’s Opinion

On appeal, the court affirmed, finding support in the record for the trial court’s opinion that the defendant forced the doctor to file suit and that the defendant’s delay in payment was neither reasonable nor in good faith. Accordingly, the trial court was correct in tripling the award of lost interest resulting from the delay and in awarding attorney’s fees to the doctor. The appellate court concluded its opinion with a statement that the doctor could also submit a petition for appellate attorney’s fees to the court for its consideration.

What to do When an Insurance Company Acts in Bad Faith

The Law Office of John C. Manoog, III, handles a wide array of accident cases, including car accidents, truck accidents, and motorcycle accidents. Our many years of representing injured people have equipped us to know when an insurance company is dealing fairly and when it is not. If you have been trying to represent yourself and are finding out what so many injured people have discovered – that insurance companies are out to make a profit, not settle a claim at a fair value – give us a call at (888) 262-6664, and we’ll set up a risk-free appointment to discuss your case with you. Nos falamos Portugues.